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Micro-Earnings in the Bittunes Platform

We have found that the microearnings concept is often not easy for people to understand, because it is such a new paradigm. Please take the time to read and understand the process, where it is evolving to, and the implications.

The Bittunes micro-earnings strategy changes the economics of content distribution

Bittunes allows users to receive micro-earnings in Bitcoin for distributing music. This effectively creates a situation whereby fans work in partnership with the artists they follow. As each sale occurs the Artist receives their payment instantly, and a selection of previous buyers of that track also share ‘micro earnings’ instantly, anywhere in the world. This mechanism is facilitated by many new conditions and components not least of which is Bitcoin itself, which serves as the default global currency to underpin the system. However, the role of the Artist as ‘primary publisher’ is also fundamental.

When the Artist sets the rules for distribution, its a total game changer.

If the Artist, (as primary publisher) can be certain of a reliable and instant payment process, by working in cooperation with their own fans as a distribution network, and the system has a high level of technical integrity, then numerous issues begin to resolve. This is because, if these conditions are met, then..

a) So called ‘piracy’ becomes a non issue.
b) Earnings from sales are delivered instantly, to all stakeholders
c) The whole world becomes one marketplace

Immediately the entire world becomes one massive potential market and the commercial relationship between Artist and fan becomes a direct communication channel to individual fans and/or clusters of fans in different geographic regions. (see also: ‘Social Songs‘ for related innovative features)

The microearnings distribution system began in Bittunes with simple fixed ratios

In the current Bittunes application, once a song has moved to the $1.00 price point, an Artist will always get $0.40c from every song, and Bittunes will always get $0.20c. The novel aspect is that ‘previous buyers’ of the track being purchased will share the other 40% and this process will occur completely automatically. However, there is a probability index algorithm applied that seeks to make a selection of 5 previous buyers of the track being purchased from the set of ‘all previous buyers’ of that track.

Selection of the 5 previous buyers is based in part, on what we call ‘Good Citizen Behaviour’ in the Bittunes ecosystem. That is, if a user returns and logs in often to the platform and rates songs, (on a 5 star rating system) and performs various other loyalty metrics, they are more likely to be automatically selected to be one of the 5 previous buyers rewarded. A different 5 is typically chosen in relation to each song sale. (Note: Bittunes 2.0 will introduce variable transaction ratios, see: ‘Core Processes‘)

So, let’s extrapolate that.. ~ What happens when we have one million song sales?

In the illustration below, we project what would typically happen if a song was sold 1M times on Bittunes.. i.e. After 1M sales of a $1.00 track, the Artist would make $400k, Bittunes $200k and the remaining $400k would be divided among the previous buyers of that track, with many users making up to 1000% profit on their $1.00 purchase. (NOTE: most songs in Bittunes trade at $0.50 and Bittunes takes no percentage)

For Bittunes to be able to grow to support millions of users, a series of things need to happen. The current Android application will be upgraded to a cross platform service that extends Bittunes so it can be used by iPhone and web users. The enhanced platform also needs to:

Facilitate the entry of innumerable Indie labels around the world which are currently not supported by the existing Bittunes platform, (this will be done by introducing variable transaction splits in the Bittunes business logic).

Create an ‘ingestion engine’ for the uploading of thousands of simultaneous tracks, so that Bittunes can work effectively with Independent Labels and Distributors which have very large artist and track lists.

Enable Bands to have their earnings automatically divided to different band members in ratios defined by each band. (doing so will dramatically increase the user base as every Band member will then need an individual Bittunes account)